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1932 › Herbert Hoover (Republican) › Regulation of securities issuance and exchanges
No federal 'blue sky' law — securities regulation belongs to the states, and the President should not police booms
pledge_forwarddirectional_stancecandidate_directevidence A Banking & FinanceFederal–State Relations similar solutions · similar reasoning
Solution
Leave control of securities issues to the states (New York above all), where 'the full constitutional authority for that sort of action rests'; reject a federal securities board as unconstitutional, centralizing and unwanted; reject the idea that a President should 'tilt with a boom' or supervise municipal finance.
Rationale
'I am advised that this is not within the constitutional authority of the Federal Government'; a Washington board 'dealing out certificates as to issue of securities' would be 'centralization of government beyond anything we have hitherto witnessed'; the Federal Reserve, not the President, was the Democrats' own chosen instrument against panics.
The sharpest institutional contrast with Roosevelt's Columbus program; the Securities Act of 1933 and the SEC (1934) did what Hoover here calls unconstitutional.
Statements (3)
I am not disputing that many securities are issued which are dishonest and over which there should be a control. But, the full constitutional authority for that sort of action rests, of course, in the States, and I am advised that this is not within the constitutional authority of the Federal Government.
In any event, his plan would be centralization of government beyond anything we have hitherto witnessed and does not seem to accord with the forgotten Democratic theory of State rights.
Now, I have little taste for this proposal that the White House should be turned into a stock tipster's office. I earnestly object to the idea that such a form of dictatorship should ever be set up over the American people, even if they do get overoptimistic.
Follow-through
not_applicable
Hoover lost the election; the pledge could not be tested in office. The Securities Act (1933) and Securities Exchange Act (1934) enacted the federal 'blue sky' regime Hoover called unconstitutional; the courts upheld them.
Enacted by others
| 1934-06-06 | Franklin D. Roosevelt | statute Securities Act of 1933 and Securities Exchange Act of 1934 | Direct reversal. source |
Other positions on this issue
- No implied government approval of foreign bond sales; officials will not try to move stock prices — Franklin D. Roosevelt, 1932 specific_pledge
- Federal regulation of securities and commodity exchanges, interstate holding companies and interstate utility rates — Franklin D. Roosevelt, 1932 specific_pledge
- Require full public disclosure on all offerings of stocks and bonds — Franklin D. Roosevelt, 1932 specific_pledge
- Keep federal regulation of securities marketing and interstate utilities, vested in independent tribunals under definite standards subject to court review — Alf Landon, 1936 directional_stance
1932-hoover-oppose-federal-securities-law · created by claude-fable-5-1 · review: unreviewed